As a post bankruptee, I can say its not as bad as it sounds, or people think.

and as for the comment "dont EVER think about getting mortgages and such" thats B.S.

Check your facts DieselGino

 

ya, how about telling this guy to stop living above his means....

 

maybe it should be harder?...make people take debt more seriously...

 

Oh I took it more seriously TRUST me.

I had my reasons, which are personal.

And its a pain in the ***, the reporting to them for atleast 9 months with your income every month and all that.

But I've already started re-building mine, and its only been over a year (this past june) since I filed.

 

once u get into debt trouble and you get help you tend to take things a bit more serious

 

he was making 75k+, lost his job early this year because he took 2 months off to help his wife recover from a kidney-vessel operation.

Thats why i feel for the guy, want him to do wats best.

i guess they were living off of credit, but the smartest thing he did was not touch his wife's side.

hes 26.

 

hopefully he does alright, sounds like he's been having a pretty rough time....

 

Tell your buddy to talk to a Trustee in bankruptcy...consultation is free, and they will go through his stuff with him and help him decide. If he wants I can help him out...I work with Trustees. He can call me at (416) 226-4631 ext. 233.

I'll be in the office by noon today.

 

he told me he was gonna go to see someone at BDO or something.

4got to mention that 20 K income is from Emplyoment insurance.

Thats why its so low. he can't work right now full-time anyway.

 

talking to a bankruptcy trustee or any consultant will not help much cuz 45K is too much to bear for someone making less than half of it in a year.

the best they will recommend is to negotiate with the creditors to reduce the interest rate and then get a line of credit and consolidate all the loans in one bucket to allow for one single payment every month. in most cases like this...a line of credit can be arranged by these credit counsellors.

The trick is that even if the min. monthly payment is set at 1%, that is around $450 a month. Can he bear that? If its higher..it will be worse. This way..he is paying 12% of the debt down every year but the effective % will be lower cuz of the compounding of interest. Say if that is around 8-9%, he is looking at many many years before this debt is paid off.

The only way to avoid bankruptcy in my opinion is for him to try real hard to get a new job which pays him more...reduce expenses and solely focus on paying this shyt down.

If he cant do this...then go and file bankruptcy cuz even thinking about trying to get out of this when you dont have alot of options is a simple waste of time.

Lastly....banks manage an ARI (account risk indicator) and CRI (credit risk indicator) on all accounts...by not filing bankruptcy and trying to get out with this level of debt and the guy on insurance income....your beareau as well as these two ratings will go down all the way to the bottom anyway (slightly above bankruptcy levels) so its better to bit the bullet once.

 

BDO Dunwoody FTW!!!!

 

I talked to my boy - Alex.

He's probably going to go with bankruptcy.

Legally, you are supposed to hand in all your credit cards and they get written off, through discharge.
But, if you don't tell the trustee about say ONE credit card you have because you don't want it written off, do you think there will be any issues because of that?

In essence, if he can keep ONE credit card, which he maintains well - that has a low balance, say a few hundred dollars, and writes off the rest of his cards and line of credit through bankruptcy, then when his 6 years are done after discharge, he'll be able to use that ONE credit card he held onto to have INSTANT credit history.

See apparently, after 6 years, everything related to the bankruptcy is purged. But if that ONE card wasn't included in the bankruptcy, it won't be purged, and if he kept it in good standing by keeping the balance low and paid, [which he can handle cuz he told me he has one card with only 200 owing], then everything but that ONE card will be purged.

When someone pulls his credit report 6 years from now, only that one will show - and that is in good standing, hence, good credit history.

anyone following - or is it too confusing.

 

wishful thinking...

banks and card issuers check your beaureau(sp) status every now and then...in some new hi tech systems...their systems are linked with the beaurau records in a passive mode so after every quarter or two quarters.....an update is shared on a sample of accounts (i dont know personally how large the sample can be)

if you boy files bankruptcy and then holds onto one of the cards, thats fraud. that is even worse than bankruptcy as it may lead to a criminal offence...so my 2 cents...dont try to cut corners and do it the legal way.

 

if he dont cancel it, the bank will...he'll goto use it and it wont work one time or another...

 

since your buddy still has to continue taking time off to take care of his wife, i say bankrupcy... but if he is able to resume work very soon, i say keep the debt and pay it back...

if your friend is able to get a job 75k a year... i have no doubt he has the qualification to find another job like this, not more but not much less... right?

so the problem right now is not his debt, the question is... does he have the time to work full time. i feel sorry for your friend because at 26, he is going through some pretty rough time. but again, he isn't that worst off coz he had a pretty good job before, that proves he has the ability to find a great job with his skills and qualification.

so, the answer between the options relies on if your friend still need to take time off to take care of his wife. if he does, then bankrupcy, i don't see him can focus at work and plus he won't have the heart to go find a job yet. but if his wife is recovering well and he can resume to the workforce. i say he should find another job again with similar paying say around 50-60k a year atleast... he can pay off the debt.

no matter what, i hope the best can go with your buddy

 

They will find out about that ONE card.

Bankruptcy is not like you just go into the office and say I want to file bankruptcy and you do the paper work and your done.

You have to report to them every month what income your making and where all your money is going to. They pull a credit file on you when you go for your second appointment... so they will have a list of all your creditors.

and also, its not free to file bankruptcy... I was in debt about $13,000 and based on that, and my income I had to pay only the trustee fee of $175 a month. But it all depends on how much you make and how much you owe on how much you pay. and the length of time you pay it for.

I had to pay mine for 9 months. And I am discharged already and all that good stuff

Good Luck to you... sorry your friend

 

You also have to go to counselling classes about money management (2 of them) if they are not completed your bankruptcy wont be discharged until they are done.

and.... hmm I dont know what else to tell you and your friend. tell him to open a new bank account before he files. because once he does they will close his current bank account and take all the money in it... so if he has any overdraft available, USE IT! cause its all being written off anyways!

 

I spoke to him last night. His wife is slowly getting better. He thinks he can do part-time now, but he says its no point because EI will pay more for him to NOT work [if the only choice is p/t].

He figures he can do full-time starting Jan/Feb 2007.

From what I've gathered, he owed 45K on a combination of credit cards and a line of credit. his total available credit is 53K. [cause he tells me he can use his credit for another 8K].

My estimate is that he pays 1300 a month in minimum payments, of which, 500 or so is interest.

 

hey pays 15,600/yr in payments, 10 of that is inrest...it will take him like 5yrs to pay it off...if he keeps up that kinda payment schedule and no other "bad" things happen...I dunno how u can live makin 20k yr and pay 16grand to debt...thats impossible

 

oh man, thats bad, he was making 75K+....:cry: